The latest survey gauging customer satisfaction with mortgage servicers was released last week, and it delivered both good and not-so-good news. On the bright side, big banks like Citigroup Inc. (NYSE:C), JPMorgan Chase & Co. (NYSE:JPM), and Wells Fargo & Co (NYSE:WFC) all did quite a bit better this year compared to last, and all came in well above the industry average.
A sore point for the biggest banks
The mortgage business has been problematic for big banks since the crisis, as practices such as robo-signing and lax servicing models have caused outrage leading to regulatory reprimands and penalties. Issues still exist, as the most recent National Mortgage Settlement monitor report shows.
But, things are getting better, and J.D. Power, the administrator of the 2013 U.S. Primary Mortgage Servicer Satisfaction Study gives the credit to reforms required by the $25 billion pact signed by Ally Financial and the Big Four. The firm found that satisfaction has increased from last year’s survey, noting that rules promulgated by the Consumer Financial Protection Bureau have helped address some of the more gregarious problems.
The best, and the worst
For the fourth year in a row, BB&T Corporation (NYSE:BBT) has taken the top spot for the highest consumer approval rating among mortgage servicers — scoring 765 out of a possible 1,000 points — though it did register a drop from last year’s grade of 803. At the very bottom of the pile, servicers Ocwen and Nationstar still reside: Ocwen improved by 36 points, though Nationstar lost 11 points.
The average satisfaction index marker rose to 733 from 725 from the 2012 survey to the current poll, and most of the big banks sit well above this symbolic line in the sand. JPMorgan Chase & Co. (NYSE:JPM) earned a score that placed it in the category with the best of the servicers, a step up from last year. Wells Fargo & Co (NYSE:WFC) moved up by two ratings, putting it on the same level as JPMorgan. Citigroup Inc. (NYSE:C) moved up a notch as well, leaving only Bank of America Corp (NYSE:BAC) sitting below the industry standard, with a rating of 714.
Bank of America must address these issues, or else
The survey gauged customer satisfaction in four areas, according to J.D. Power: billing and payment, escrow accounts, servicers’ websites, and telephone contact.
As big banks shed their mortgage servicing rights to ease into new capital requirements, servicers like Nationstar and Ocwen have grown by leaps and bounds. Though these companies need to adequately deal with the shortcomings highlighted by this study, it is possible that the relative newness of the servicing industry may be to blame for some of the errors that irked customers, made by servicers with little experience in the business.
For Bank of America Corp (NYSE:BAC), however, no such excuses can be made. The bank has been in the mortgage business long enough to know better, and its acquisition of Countrywide should have given it ample opportunity to get up to speed — particularly when it comes to dealing with troubled accounts and distressed borrowers. And, yet, it still can’t seem to get the hang of the mortgage business, particularly the customer relations side.
Bank of America Corp (NYSE:BAC) seems to go out of its way to cause itself problems, as evidenced most recently by the allegations of lying and deceit in regards to loan modifications. The mortgage business may be slow right now, but it is a great moneymaker for banks, and it will pick up again as the housing recovery gains strength. B of A needs to smarten up and fix its internal problems, or it will find itself out in the cold when the new mortgage wave hits.
The article Bank of America Just Can’t Seem to Grasp the Mortgage Business originally appeared on Fool.com.
Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
